Correlation Between Thayer Ventures and HUMANA

Can any of the company-specific risk be diversified away by investing in both Thayer Ventures and HUMANA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Thayer Ventures and HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thayer Ventures Acquisition and HUMANA INC, you can compare the effects of market volatilities on Thayer Ventures and HUMANA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Thayer Ventures with a short position of HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thayer Ventures and HUMANA.

Diversification Opportunities for Thayer Ventures and HUMANA

0.16

Correlation Coefficient

Thayer Ventures  HUMANA

Average diversification

The 3 months correlation between Thayer and HUMANA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC and Thayer Ventures is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Thayer Ventures Acquisition are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and HUMANA go up and down completely randomly.

Pair Corralation between Thayer Ventures and HUMANA

Assuming the 90 days horizon Thayer Ventures Acquisition is expected to generate 16.35 times more return on investment than HUMANA. However, Thayer Ventures is 16.35 times more volatile than HUMANA INC. It trades about 0.03 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.07 per unit of risk. If you would invest  1.30  in Thayer Ventures Acquisition on December 25, 2024 and sell it today you would lose (0.20) from holding Thayer Ventures Acquisition or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Thayer Ventures Acquisition  vs.  HUMANA INC

Thayer Ventures Acqu

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thayer Ventures Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Thayer Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

HUMANA INC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thayer Ventures and HUMANA

The main advantage of trading using opposite Thayer Ventures and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thayer Ventures position performs unexpectedly, HUMANA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HUMANA will offset losses from the drop in HUMANA's long position.

The idea behind Thayer Ventures Acquisition and HUMANA INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.